IDBI Bank ups QIP size 35%

Public sector lender IDBI Bank has raised the size of its equity share offering to institutional investors from  Rs 2,800 crore to Rs 3,771 crore, in line with the government’s approval.

N S Venkatesh, executive director and chief financial officer, said top management of the bank will meet big domestic and foreign investors till January 25, 2016, for the qualified institutional placement (QIP). The IDBI stock was trading lower at Rs 64.3 per share on Bombay Stock Exchange. The government of India (GoI) holds 76.5 per cent stake in the bank. GoI has demonstrated continued support to IDBI through equity infusions at regular intervals. The recent equity infusion of Rs 2,229 crore was done on December 29, 2015.

The Mumbai-based lender has already raised tier-II capital worth Rs 1,900 crore to strengthen its capital adequacy. The capital adequacy ratio was 11.66 per cent with tier-I of 8.04 per cent at the end of September 2015 against 11.71 per cent a year ago.

Rating agency ICRA has assigned IDBI ‘AA+’ for its Tier-II bonds. The outlook is negative. It reflects the continued asset quality pressures on the bank’s credit portfolio. IDBI’s asset quality has slipped in the past few quarters on the persistent dullness in the operating environment and relatively high exposure to the sensitive sectors of the economy, ICRA said.

IDBI’s gross non-performing assets (NPAs) stood at 6.92 per cent and net NPAs at 3.16 per cent at the end of September 2015.